With investors betting on financial assets, a trend which was visible in the record inflows of Rs 20,000 crore in equity mutual funds in August, Ambit Capital is positive on this theme in the financial space.

“Asset managers, insurance companies, and broking houses, among others, are positive stories,” Pramod Gubbi, Head of Equities, Ambit Capital told CNBC-TV18 in an interview. “Several NBFCs are beneficiaries and are in a position to gain structurally as well,” he told the channel.

Having said that, a dichotomy of these increasing flows and disappointing fundamentals is making investors worried on the valuations too, he added. The issue, he highlighted, is also the lack of recovery in the economy, which could be lacking for 6-12 months. A recovery in this or a sharp correction could get investors excited again, he told the channel.

Speaking on sectors, Gubbi said valuations are again the biggest hurdle for consumption theme. He reiterated the economy’s health to suggest that demand for consumption could be lower, impacting the stock too. “As a result, combination of weakness and valuation, it is worth taking some profits in staples and discretionary,” he told the channel.

Meanwhile, gas stocks were in focus on Monday after India renegotiated the pricing of liquefied natural gas (LNG) imported from Australia's Gorgon project to make the imported fuel affordable to price-sensitive domestic customers.

Gubbi said the research firm’s stance on the sector was positive for a long time and will be a continued theme for a few months. In fact, in the long run, he expects the industry to move to this source as well.

He believes information technology (IT) space is not a great place to be if a company is undergoing changes in the current business environment. The industry is still grappling with changes in the way IT services get consumed, he added.